Could not load assets. Please refresh the page.

These are explanations and solutions for IB past papers, not the official version. For official papers, you can go to IB Follet or access them through your school.

01 Hours 30 Minutes

100 Marks

Calculator NOT allowed

IB BUSINESS MANAGEMENT SL, Paper 2, November, 2006, TZ0, Solved Past Paper

Master the 2006 IB November for Paper 2 Business Management SL with examiner tailored solutions and comments for TZ0

Question 1 [Explained]

3X is a prominent company founded in 1880 in the United States, known for its commitment to publishing vital business and financial news with a focus on accuracy, integrity, and trust. The company has expanded its operations globally, publishing over 38 newspapers and providing news for television through a global alliance. Additionally, 3X is a leading provider of instant electronic business news for financial institutions, achieved through organic growth and strategic mergers and acquisitions. Recently, 3X entered the Russian market by forming a joint venture with a successful local publisher, Kalowski. The company has established a code of ethical conduct for its employees, recognizing the importance of maintaining customer trust in the truthfulness of its news. This ethical code includes guidelines on share trading, accepting gifts, political activities, and employee rights. In recent years, 3X has shifted its focus from printed newspapers to digital news, recognizing the benefits of timely updates and cost-effective distribution, despite some customer and union resistance to digital media.

Question 1 [a] [Explanation]

This question asks you to explain how the mission statement of 3X can assist in decision-making processes within the organization. The mission statement outlines the core purpose and values of the company, such as accuracy, integrity, and trust, which can serve as guiding principles for employees and managers when making important decisions. By aligning decisions with the mission statement, 3X can ensure consistency in its operations and maintain its reputation for delivering vital business and financial news.

Question 1 [b] [Explanation]

This question requires you to describe two potential benefits that 3X could gain from setting ethical objectives. Ethical objectives are goals that align with moral principles and values, and they can enhance the company's reputation, improve employee morale, and provide a competitive advantage. By setting ethical objectives, 3X can demonstrate its commitment to responsible business practices and foster trust among stakeholders.

Question 1 [c] [Explanation]

This question asks you to discuss the reasons why 3X might have chosen to enter the Russian market through a joint venture with Kalowski, rather than setting up independently or acquiring a local publisher. A joint venture involves collaboration with a local partner, which can provide valuable insights and resources while minimizing risks. Consider the potential benefits and challenges of this approach in your discussion.

Question 1 [d] [Explanation]

This question requires you to analyze the role of primary and secondary sources of data in helping 3X develop its presence in the digital news and information market. Primary data is collected firsthand through surveys, interviews, or experiments, while secondary data is obtained from existing sources such as reports, studies, or government statistics. Consider how these data sources can provide insights into market trends, consumer preferences, and competitive dynamics.

Question 2 [Explained]

Essemo, a company established in 1920, has become a global leader in the ice cream industry. The company offers a diverse range of products, including those aimed at children, restaurants, supermarkets, and a premium range for adults. Despite their success, Essemo's management believes that there are limited growth opportunities left in niche markets. As a result, they are focusing on expanding into new markets, particularly in India and China, where they see significant potential due to large populations, growing economies, and increasing demand.

Essemo is also aware of the challenges posed by intense competition from strong rivals in Europe and North America. Additionally, the trend towards low-calorie diets in mature markets could negatively impact ice cream sales. The company is considering various strategies to sustain and grow its business in this changing landscape.

The product range includes:

Dotty: Aimed at young children, this product is colorful and low-priced, using cost-effective ingredients. Despite significant management effort, sales have not met expectations.
Nutty: Targeted at teenagers and young adults, this medium-priced product features a range of flavors with chocolate and peanut toppings. It is considered a cash cow.
Get2gether: Aimed at families, this product is sold in two-liter tubs for freezer storage at an affordable price, using medium-range ingredients.
Royale: A super-premium product aimed at young professionals, offering high quality at a premium price. It is also viewed as a cash cow.
Ben & Berry: A premium quality family ice cream with a high price and a fun theme. A portion of sales revenue goes to children's charities, and it is considered a rising star.

Question 2 [a] [Explanation]

This question asks you to explain the concept of "cash cows" and their significance for Essemo's future. Cash cows are products or business units with a high market share in a mature or declining industry. They generate consistent cash flow with little investment, which can be used to fund other areas of the business. Understanding the role of cash cows is crucial for Essemo as they plan their growth strategy and allocate resources effectively.